ARTICLE
TITLE

Financial, Macroeconomic and Corporative Management Indicators to Predict the Insolvency of B3 Companies

SUMMARY

Objective: To analyze the effect of financial, macroeconomic and descriptive (qualitative) corporative management indicators to predict insolvency of Brazil, Bolsa, Balcão (B3) (Brazil, Stock market, Bench) companies, between the years of 2006 and 2016.Method: Logistic regression was estimated according to unbalanced panel data, after choosing the best predictive variables for the model, utilizing the backward stepwise model. The sample is based on 55 publicly-traded non-financial corporations.Originality/relevance: When macroeconomic and corporative management variables are inserted, the expectation is that the company’s insolvency condition have another explanatory alternative in order to cut down on the negative aspects that such a condition imposes upon the concerned parts.Results: The number of the model’s correct classifications was 89.5% and pseudo R-squared = 0.4872. Results show that the financial indicators, just as verified by other works, are fine predictors of company insolvency. Moving onto the corporative management indicators utilized, p-value results do not dismiss the theoretical relationship that management elements might be linked to corporation insolvency. Regarding macroeconomic factors, only one variable (among 5) showed a value of statistical significance according to the definitions.Theoretical and methodological contributions: Results may justify why only the variable gross domestic product (among the macroeconomic ones) has presented a significant statistical relationship with the predictive model, as organization management may overcome issues caused by macroeconomic variables.

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